COBRA: Foolproof administration is key to compliance

THE LAW. The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires companies with group health plans to continue offering health insurance benefits to employees and their dependents for a period of time (18 to 36 months) after the benefits would normally end, such as when a worker leaves the company.

COBRA applies to companies that employed 20 or more workers on an average business day during the prior calendar year. But 37 states have "mini-COBRA" laws that apply COBRA to much smaller companies. (See Resources box below for state list.)

The law requires you to offer insurance, not pay the premium. Also, you don't have to offer COBRA continuing coverage to workers fired for "gross misconduct," although that criterion is weakening in the eyes of courts. (YATL, March 2002.)

WHAT'S NEW? The Trade Act of 2002, signed into law this summer, requires some employers to provide a second 60-day COB...(register to read more)

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